Appeals court: Prosecutor can't sue BofA

Judge upholds ruling, orders her to pay fees

A San Mateo County prosecutor who was arrested and chained to a jailhouse wall for allegedly trying to pass a bad check at a Bank of America branch in San Francisco - a charge that turned out to be groundless - not only cannot sue the bank, she must pay $50,000 to the financial giant in attorneys' fees, a federal appeals court says.

Sharon Henry, who was locked up for two hours, denied her diabetes medication and barred from making a phone call until the bank realized its mistake, sued the bank and San Francisco police for negligence and false arrest.

But a federal judge found that Henry's suit was baseless and an attempt to stifle the bank's freedom of speech, and ordered her to pay BofA's legal costs, a ruling upheld by the Ninth U.S. Circuit Court of Appeals in San Francisco.

An attorney for Henry called Wednesday's appeals court decision "a travesty of justice" and said his client, a deputy district attorney in San Mateo County, was considering an appeal.

Partner's check

The case dates from March 2008, when Henry went to BofA's Noe Valley branch on 24th Street to deposit a $27,500 check from her domestic partner in her own account and withdraw $1,000. The partner, Kathleen Wilkinson, had a credit card account at the bank.

According to court testimony, the bank manager, Nancy Mendoza, verified that the amount was within Wilkinson's credit card limit, then checked a database that included bank account-holders but not those with only credit card accounts.

She found a listing for a Kathleen Wilkinson with a notation that she was studying abroad - but did not realize that the listing referred to a different Kathleen Wilkinson, not Henry's partner.

Mendoza phoned the number on the listed account, was told by Wilkinson's mother that the family didn't know Henry, then called the police. Two officers arrived at the bank, arrested Henry and prevented her from using her cell phone to call her partner.

No call to partner

The officers later testified that they had been trained in such cases to call the person whose number was on the check - Henry's partner - but had not done so in this case.

Henry was handcuffed, driven to the police station, shackled and cut off from her phone and her medication, according to court records.

She was freed two hours later after her partner went to the bank looking for her and spoke to the manager.

Henry's suit accused the bank of negligence that led to her false arrest. But in a July 2011 ruling, U.S. District Judge Richard Seeborg said California law shields the bank from liability for any statements its employees make while investigating a possible crime.

Arrest justified

Seeborg also said that in hindsight, police had failed to resolve the investigation as quickly as they might have. Nevertheless, the judge said, the officers had probable cause to arrest Henry in light of what the bank manager had told them.

The judge also rejected Henry's claim that she had been arrested because she is African American.

Not only was Henry's suit groundless, Seeborg said, but in going to court to challenge BofA's report to police, she was engaging in unjustified interference with the bank's legally protected freedom of speech. On that basis, the judge ordered her to pay the bank's $50,000 legal costs.

The appeals court upheld Seeborg's decision in a 3-0 ruling. It said that although "Henry's claims arise from a perfect storm of coincidences and a case of mistaken identity, and ... her actions in this matter were blameless," neither the bank nor the officers violated her rights.

It also upheld the order that she pay the bank's legal fees, under a state law penalizing baseless suits that chill free speech.

Bank of America declined to comment.

Fuentes, Henry's lawyer, said the ruling was an indication that "banks are too big to be sued."